Blue state? Seattle gets rolled in Olympia tax deal

Originally published July 5, 2017 at 6:00 am

Democrats just squandered their best chance for progressive tax reform with the big budget deal last week. It’s a perennial puzzler: In such a blue state, how is it that Republicans roll the Democrats every year in Olympia?

They capitulated to a Republican plan, hatched by senators in Centralia (John Braun) and Ritzville (Mark Schoesler), that hammers Seattle and the suburbs with one of the largest property-tax increases in local history. While at the same time passing a bunch of tax loopholes for businesses.

About all you need to know is that Tim Eyman was chortling about the result.

“They beat back the Democrats’ income tax, the Democrats’ capital-gains tax, the Democrats’ carbon tax, and the Democrats’ business taxes,” Eyman wrote in an email declaring victory.

He is right on all points. This legislative session was always going to raise a bunch of new dollars for the schools — about $1 billion to $1.5 billion more per year — because the state Supreme Court had ordered them to do it. The biggest question was: Where would the money come from?

From the wealthy or our booming corporations? Or through the same worn-out schemes as usual — regressive taxes that hit the working class?

Democrats have argued for years that our state unfairly loads its burdens onto those with the least ability to pay. They are not only right about this, but have a variety of plans that might address it, such as taxing windfall profits made in the sale of real estate, stocks or investments (the capital-gains tax).

Instead, staring at a ticking government shutdown clock, they bafflingly went along with a GOP plan to jack property taxes in the very places that are already having an affordable housing crisis — Seattle and the suburbs — while cutting them outside of Puget Sound.

The choice makes some political sense for Republicans. The tax hits the blue parts of the state while missing the red.

But the tax is so huge in Seattle and surrounding areas, it’s bound to put the squeeze on some renters and those on fixed incomes.

The biggest city-run levy in Seattle history, 2015’s $930 million roads and transportation measure, is raising your taxes this year by 51 cents per $1,000 of assessed property value (about $270 on the median home of $530,000.) This new state tax, next year, is 87 cents more per $1,000 in Seattle (or $460 on the median home.) So without any public debate, state lawmakers just imposed a tax that’s 70 percent pricier than the city’s biggest levy.

“No actions were taken to offset higher property-tax bills for lower- and middle-income homeowners and renters who, under our current tax code, pay up to seven times more in state and local taxes as a share of their incomes than the richest Washingtonians,” the Washington State Budget and Policy Center, a liberal think tank, said in a statement.

In boomtown Seattle, the benefits of growth mostly go to the top, while the costs already are heaped, disproportionately, on the middle and bottom. It’s already an almost perfectly designed vise for squeezing the middle out of the city. Democrats could have taken a stand to ease this pressure. Instead they cranked it up.

Why? Maybe Republicans simply don’t care if they force a government shutdown, so Democrats, who do, are always holding a weaker hand. Maybe Democrats don’t care about the middle class as much as they say they do. Maybe these particular Republicans are just tougher and smarter at their jobs.

In any case, it’s a myth Seattle runs this state. It just got rolled. For all Seattle’s swagger, the true political power right now is in tiny Centralia and Ritzville.